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A fixed-price contract is a contractual agreement with a predetermined value for the goods or services provided. A fixed-price contract sets the terms of a project and establishes the price of goods or services. It outlines exactly what the seller is required to do and the sellers obligations for a firm price.
What are the benefits of a fixed-price contract?
The benefits of fixed-price contracts are that they come with a pricing guarantee. So long as the project doesnt go beyond the defined scope of tasks and responsibilities, the price wont change. These contracts typically provide a well-defined process complete with specific phases and deadlines.
Can a fixed-price contract be changed?
Changes are time-consuming Even a fixed-price contract can be subject to changes. Maybe a material simply isnt available, or the time-frame to complete the job needs an extension due to unforeseen circumstances. In this case, the proper way to handle a change is to create a change order.
What is the difference between a fixed price and a cost-plus contract?
Budget: A fixed-price contract is just that: fixed. The agreed-on price at the beginning of the project is the price at the end. Conversely, a cost-plus contract estimates a projects costs but doesnt set the final price until the project is completed.
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Fixed Price Contracts Guidance - The University of Maine
A fixed-price agreement (also known as firm-fixed price, firm-price, or fee-for-service contract) is an agreement where the contractor pays a firm price for the
Fixed-price contracts are normally based on a fixed scope, which is not compatible with Agile. However, most customers still insist on having fixed-price
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